Govt will recover Rs.653 crore from fertiliser firms for claiming excess subsidy
The government has decided to recover the subsidy availed by fertiliser companies for importing di-ammonium phosphate (DAP) in February and March 2012, despite adequate stocks.
The matter was highlighted by the Comptroller and Auditor General (CAG) in its report in 2015.
“The inter-ministerial committee had on 7 February 2012 recommended substantial reduction in the rate for nutrient-based subsidy (NBS) for DAP for 2012-13. The fertiliser department decided on 8 February that DAP, NPK (all grades) and muriate of potash (MOP) arriving at various ports in February and March 2012 would not be sent to any state till further orders,” the CAG report said.
The department, however, reversed the decision on 28 February 2012 despite adequate availability of the fertilisers. This allowed companies to dispatch DAP to districts and claim subsidy, resulting in avoidable burden of Rs.653 crore, the report said.
A senior government official, requesting anonymity, said a committee comprising top government officials has decided that subsidy amount will be recovered from the fertiliser firms.
“The committee was of the unanimous view that the recovery — the difference between the higher NBS rates for DAP in year 2011-12 and the lower NBS rates for DAP in year 2012-13 — should be made from the companies,” the official said.
Another official, who also did not wish to be named, said the department of fertilisers has been asked to calculate the amount claimed by the companies on imported DAP during that period and take necessary action for its recovery.
According to estimates, 13.18 lakh metric tonnes (LMT) DAP was available in February 2012 against demand of 4.08 LMT. While 8.77 LMT DAP was already available in the states as on 1 February 2012, 4.41 LMT indigenous supply was received. Therefore, there was no need to supply 8.72 LMT imported DAP to the states.
Similarly, in March, 4.76 LMT imported DAP was supplied to states, despite abundant stocks.
“Fertiliser companies were able to send imported DAP to district headquarters and claim subsidy at higher rates of 2011-12. As a result, the department of fertilisers had to bear additional subsidy burden of Rs.653 crore,” CAG highlighted in its report.
A third government official said there is a merit in the reasons given by the department of fertilisers in its reply to the Comptroller and Auditor General and Public Accounts Committee (PAC).
However, he said, it cannot be overlooked that the trend of international price of imported P&K fertilisers is available and the companies may be aware of possibility of deduction in NBS rates.
Queries emailed to ministry of chemicals and fertilisers on 10 February remained unanswered.
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